This quarter, Medicare added a 9th test to its list of "ADLT" tests - advanced diagnostic laboratory tests. ADLTs are a specially defined type of lab test whose code is priced initially at its market list price (assuming it hadn't been previously priced on the CMS fee schedule) then annually repriced to its market median price.
The ninth test is Code 0239U, Foundation Medicine Liquid CDx test. It was approved 1/25/2021, with its "New ADLT Initial Period" to run 4/1/2021 to 12/31/2021. Prior to 4/1, the test is "contractor priced." The ADLT price will be $3,500.
Historical note - The initial paraffin-based FMI CDx test was the "first ADLT," with code 0037U, and granted ADLT initial pricing status from 7/1/2018 to 3/31/2019.
ADLT 0239U was applied-for July 2020, released October 2020, effective January 2021. The FDA approval was October 26, 2020 (here). It was an FDA "breakthrough" device. The 64 page safety summary P200006B is here. An additional November 6, 40 page safety summary P200016B is here, adding genes. (I believe that FDA has to issue new "P" PMA numbers rather than updating the original - ?). The ADLT application at CMS would have waited til the actual FDA approval dates, I think, at which point it was too late to make the deadline for a January 1 kickoff ADLT pricing date.
See the updated ADLT price list here:
https://www.cms.gov/files/document/advanced-diagnostic-laboratory-tests-under-medicare-clfs.pdf
Quirks of ADLT
- Don't Mis-Time your ADLT Application versus the CMS Annual Normal Pricing Process
The ADLT pricing process is driven by the creation of a CPT code. If a lab test has a CPT code (including a PLA code) that completes the annual new code pricing process before it completes the ADLT process, then the CLFS fee schedule price will apply rather than the rule regarding the new ADLT's list price. So usually, you want to time your code creation to ensure it will finish the ADLT pricing process before CMS handles the code through the traditional gapfill/crosswalk annual process.
- Tricky Way Initial List Price Is Defined
Due to tricky ways that the ADLT regulation is written, the initial 9 month ADLT price will be the lowest price publicly available on the first day the test is available for ordering. For example, as I read it, if your price on Day One is $3000 list, $500 for uninsured patients, then your ADLT initial price will be $500.
On the other hand - as I read it - if your Day One price is $3000 list, and on Day Three you add a $500 uninsured price, only your Day One price is used to set the ADLT initial price at $3000.
See the regulation at 42 CFR 414.522, but paying extra-special attention to the definitions of the wording found there.
- Some ADLT Initial Prices Have Been ReSet by the Annual Process
ADLT's are priced annually, based on reported market prices, but it's a slow process. As I understand it, for example, 1H2018 might be a claims collection period for the ADLT, 1Q2019 a reporting period, and January 1, 2020, the new ADLT price date. So it's annual, but slow.
Two ADLT prices have been reset downward by the PAMA annual process, with Myriad test 0172U Myriad My Choice CDx [FDA] dropping from $4040 initial to $3030, and Myriad test 0090 MyPath Melanoma dropping from $1950 to $1755.
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